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Introduction

RootFi allows you to push merchants’ data from your e-commerce or point-of-sale (POS) platform into your merchant’s accounting platform. Your merchants can seamlessly reconcile their transaction data into their accounting software, allowing them to spend more time growing their business. This workflow can be used for the following types of Companies:
  • POS
  • Vertical SaaS
  • Payments Companies
  • E-Commerce Companies

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Overview

RootFi APIs enable you to handle all the common workflows required to automate your business customers’ payment data from your POS/e-commerce solution. Through RootFi, your merchant can choose to reflect their sales data from e-commerce and point-of-sale (POS) software:
  • As an aggregated daily/weekly sales invoice, or
  • As an aggregated daily/weekly journal entry
RootFi recommends using journal entries due to the following advantages:
  • Ease of use: Single daily journal entries are easier to manage, adjust, and reconcile than, for example, invoices, payments, and credit notes.
  • Controlled impact on the general ledger: A journal entry is the most granular way to impact a company’s general ledger without being confined to specific account types.
  • Platform API Coverage: Journal Entries are the most widely supported data model across all accounting platforms. Other Data Models, such as Invoice Payments, Expenses, and Credit Notes, may not be available.

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Getting Started

Here’s a summary of the steps involved to get started:
  1. Accounting Platform selection: Use RootFi’ Auth Flow to connect a business customer’s accounting system.
  2. Merchant Configuration: Once the Merchant provides access to the accounting platform, the merchant must set how the synchronization should work. This will tell you how the data should be mapped to the accounting platform.
1

Accounting Platform Selection

RootFi provides two convenient options to connect with your customers’ accounting platform:
  1. Use RootFi’ Connect Link, a convenient and secure URL, or
  2. Embed RootFi’ Connect SDK into your application
The Invite Link requires no code, making it suitable to get started without a developer. You can customize and white-label this onboarding process with RootFi’ Connect SDK, allowing authentication to occur natively in your product.Either way, your customers will be guided through a simple authorization flow to connect their respective accounting platforms to your product.
  1. Use our Dashboard or APIs to connect a customer’s accounting platform. Use the POST/invite-link API, and provide a name for your customers’ company.
  2. A unique company_id will be generated once your customer completes the authentication flow. This company_id will be used to read and write data to their accounting platform.
2

Merchant Configuration

This section provides guidelines for data mapping configuration from a POS/commerce platform to the supported accounting platforms (Netsuite, Xero, QuickBooks online).In RootFi’ POS workflow, the data types are grouped under four main features:
  • Sales
  • Fees
  • Taxes
  • Payments
You will need to create a UI for this step.Request your Merchant to Map the following features to the respective General Ledger accounts from their accounting platform:Sales Account Mapping
  1. Sales (Revenue/Income Account)
  2. Refunds (Revenue/Income Account)
  3. Gratuity/Tips (Liability)
  4. Prepaid Cards (Liability Account)
Payment Fees Account Mapping
  1. Processing Fees (Platform Fee/ Expense Account)
  2. Processing Fees Refund (Platform Fee Refund/ Expense Account)
Tax Account Mapping (Optional)Payment Account Mapping
  • Card (Accounts receivable)
  • Cash (Cash/Bank)
  • Payouts (accounts receivable)
To get the General Ledger Account Names and IDs:
  1. Use the GET/Accounts APIs to get the Account ID and Name if the account already exists in the customer’s accounting platform.
  2. Use the POST/Accounts APIs to create a GL account if it does not exist
Store this mapping internally to post Journal Entries accurately.

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Posting Aggregated Daily/Weekly Journal Entries

A Journal Entry can be mapped to any General Ledger Account.
  1. Use the POST/journal_entries Data Model to create a journal entry in your Merchants Accounting Platform.
  2. Use the Account IDs Mapped above to push Journal Entries to their respective Accounts.

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Example: Daily aggregated sales journal entry

This example journal entry covers a sales total of 1000,taxtotalof1000, tax total of 200, gratuities of 50,andpaymentprocessingfeeof50, and payment processing fee of 50. And A payout from the POS company.
AccountsAccount TypeDebitCredit
Accounts ReceivableAsset$1,200
Revenue/SalesIncome$1,000
GratuitiesIncome or Liability$50
Sales TaxLiability$200
Processing FeeExpense$50
AccountsAccount TypeDebitCredit
Accounts ReceivableAsset$1200
Bank AccountAsset$1200

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Posting Sales Invoice Method

Sales are booked on a nominal account of the type Income. This is the account that the merchant would typically use to book their sales. The merchant can select an existing account from the accounting platform. If an account is unavailable, it must be created in the accounting platform for this purpose.
  1. RootFi pushes a single sales invoice to the Accounting platform daily. This invoice represents all sales made over that day.
    • The invoice is issued to the commerce services provider.
    • The invoice contains one line item for each tax rate the merchant trades in, with this line item representing the total of all sales at that tax rate.
  2. When the merchant receives payment for the reported sales, the invoice is marked as paid and balanced against an invoice payment.

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Conclusion

This guide outlines the process of using RootFi for POS Accounting Automation. It covers the essential steps of connecting to accounting platforms, configuring merchant settings, and posting journal entries or sales invoices. By following these steps, you can enable your merchants to seamlessly reconcile their e-commerce and accounting data, allowing them to focus on growing their business.